USD/CAD Daily Edge Report – January 02, 2026
📊 Pair: USD/CAD (Loonie) 📅 Date: January 02, 2026
Current Price and Trend Snapshot 🌍
- Current Level: ~1.3720 (thin post-holiday liquidity, minor consolidation near recent levels).
- Recent Move: Down ~4.5% YTD in 2025, with CAD strengthening on relative policy stability and USD weakness.
- Key Levels: Support at 1.3650–1.3600; Resistance at 1.3750–1.3800.
- Overall Trend: Bearish on Daily/Weekly (lower highs/lows, strong sell signals); HTF bias favors CAD strength amid narrowing differentials, but thin vol risks bounces.
Technical Analysis Overview 📈
- Major Levels: Trendline resistance ~1.3780–1.3800; Imbalance zones near 1.3700–1.3750.
- Potential Setups:
- Setup #1 watch: Liquidity sweep above recent highs → BOS lower → reclaim for shorts.
- Coiled near supports suggests Compression → Expansion downside potential post-holidays.
- Strong Sell on indicators; potential reversion lower toward 1.35–1.36.
- Daily: Bearish momentum (below MAs); Weekly: Downtrend intact, targeting 1.32–1.35 in 2026 scenarios.
Retail Sentiment from X/Twitter & Social Media 🐦 Post-holiday quiet; discussions sparse with signal spam dominating. Mixed calls but low volume—no strong extremes or heavy conviction. Contrarian: Quiet retail suggests no crowded longs; edge on clean breakdowns.
Retail Sentiment Table
| Source | % Long | % Short | Extremes/Implications |
|---|---|---|---|
| Myfxbook | ~35% | ~65% | Moderately short → Mild contrarian bullish if aligns with uptrend reversals |
| OANDA/IG/FXSSI | ~50-60% long (aggregated est.) | ~40-50% | Balanced; no heavy extreme → Fade longs on breakdowns |
Professional/Institutional Sentiment 🏦
- Bloomberg/FXStreet/TradingView: Bearish USD/CAD into 2026; targets 1.32–1.35 on divergence and Loonie recovery.
- Bank Reports (JPM, Goldman, NBC, etc.): Moderately bearish (1.32-1.35 by end-2026); Fed easing vs. BoC pause supports CAD, oil stability aids. Implications: Specs shifting bearish, potential downside acceleration.
Most Recent COT Report 📊 Latest (mid-Dec 2025): Specs modestly reducing net-longs/building shorts amid USD weakness; weekly changes stable—implies cautious shift toward CAD strength if resumes.
Fundamental Drivers 💼
- Ongoing Themes: Policy divergence narrowing (Fed potential cuts 2026 vs. BoC hold at ~2.25%); oil/commodity support for CAD; USD broad softness.
- Upcoming Events (Jan 02): No high-impact red news—extended holiday thin liquidity; year-start flows possible. Expected reaction: Low vol, range-bound with risk-off tilt potential (bearish USD/CAD).
Overall Market Bias and Trading Ideas ⚖️ Synthesize: Bearish HTF bias (structure breaks + divergence + institutional targets + balanced retail = asymmetry lower). Fundamentals favor CAD into 2026 (1.32–1.35 plausible), but thin vol risks noise/bounces.
Potential Setups (H4/Daily Only):
- A-Setup (Liquidity Sweep → BOS → Reclaim): Sweep above 1.3750–1.3780 → clean retest → short targeting 1.3650–1.3600 (RR 1:5+). Stop above high.
- Risk: Holiday fakeouts; wait London/NY for confirmation—no force.
- Fade retail longs if structure confirms; small risk on chop, perfection on clean liquidity grabs.
Calm patience—market comes to us. Asymmetry in bears here into 2026.